Excessive Spending Increases

I wrote the following opinion piece, which ran in the Oakland Press:

Oakland Press: Cut unrestrained school spending before asking for more (07/15/07)

The article makes the point that school board claims of "poverty" need to be closely examined. Schools budgets increase unreasonably each year, and school boards believe those increases are pefectly acceptable.

If the link doesn't work, the full text can be found here:

School boards propose unreasonable spending increases, then lambaste the legislature for not funding them. But it’d be nearly impossible for the state to provide the level of funding schools claim they need. Taxpayers must examine these claims, and expect school boards to address the spending problems that only they can solve.

The May 2007 Michigan Economic and Revenue Outlook is forecasting 2.4 percent inflation for 2008, and state legislators must determine reasonable K-12 spending levels for next year – beyond the $13.8 billion Michigan currently spends.

An inflationary increase would equal $331 million – or $194 per pupil – which may be tough to find in this struggling Michigan economy.

Yet based on recent school budget news, even that amount won’t come close to satisfying local school boards. In fact, funding increases triple the rate of inflation wouldn’t be enough for some.

These boards honestly believe their prescribed budget increases – at two or three times the rate of inflation or more – are perfectly acceptable. Funding below those levels generates howls of protest and accusations that Michigan legislators aren’t adequately funding education.

In Rochester, where I serve as a trustee, the board just approved a budget that increases spending by $7 million, or approximately $475 per pupil. I voted NO because it’s impossible to pay for spending increases like that without tapping one-time sources like the rainy-day fund.

Rochester isn’t alone, but is unique because it currently has a sufficient fund balance. Other districts with smaller balances also want to increase spending by that much – or more – but must then scale back. They label this spending restraint as “cuts” or “shortfalls”.

Clarkston just announced cutbacks of $5.5 million from their 2007-08 budget, and will still run a deficit of $2.7 million. Farmington has been using their $13 million shortfall as a rallying cry to march on Lansing. And Avondale has said their 2007-8 budget will be shy by as much as $7 million.

The list goes on. Here are a few examples of these increases, cuts, or shortfalls, taken from recent newspaper articles or school budgets:


If Michigan taxpayers were to fund increases of this magnitude statewide, we’d need to increase school funding by $1.2 billion – annually!

It’s probably safe to say that Michigan schools aren’t going to see funding increases of that size.

Instead, districts will drain their rainy-day funds, just as the state’s done for years. Once they’ve emptied their accounts, they’ll layoff teachers, increase class size, and cut academic programs.

When parents finally choose to react to this misguided approach, they need to understand the problem begins at their local school board office, not Lansing.

State legislators control how many tax dollars are sent to your school board, but they don’t control how they’re spent.

School boards routinely approve employee contracts they cannot afford. Health care benefits for public school employees cost 25 percent more than private sector benefits. Schools districts refuse to consider merging, which could save millions of dollars. Boards still issue no-bid contracts.

But cost containment isn’t the only solution. Schools must innovate, and break out of the 1950’s school structure they’re still using today. They can make better use of technology, try lecture style classes for advanced students, or look at flexible scheduling in order to better utilize facilities and reduce staffing needs.

If school boards direct their administrators to explore these options, and we find there still isn’t enough money, then we can justifiably press the legislature.

Michigan taxpayers have, and will continue to support education, but they understandably want proof that their money is spent wisely. There are still far too many signs that it’s not.

Public education’s future rests with your local school board, and it’s time to hold them accountable.

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Merging Districts -- Real World vs. Theory

The Mackinac Center, a well-respected Michigan think tank, released the report, “School District Consolidation, Size and Spending: an Evaluation” by Andrew Coulson. (I wrote about it in a blog found here, and their full report can be found by clicking here.)

The report attempts to use data to determine whether merging districts would save money, and concludes it would not.

But their reasoning warrants a closer look because it views districts from a theoretical, one-size-fits-all perspective. Suburban and rural school districts are the proverbial apple and orange, and this approach is akin to throwing them into a blender in an effort to determine which is the ideal fruit.

The concern is that those who seek to preserve the real-world, administratively top-heavy status quo may abuse these theoretical findings. It’ll make things tougher for those of us in the trenches attempting to encourage districts to investigate and pursue efficiency.

The report uses complex mathematical formulas to “debunk the myth” that merging school districts saves money, suggesting instead that dividing up the state into districts of 2911 pupils would save Michigan $363 million per year.

This defies common sense.

Larger districts create economies of scale in purchasing, and could realize cost reductions by eliminating the duplicated administrative overhead existing between adjacent suburban districts.

And while merging smaller rural districts may yield little or no savings, pooling resources may create opportunities to enrich education with planning and curriculum development services currently missing in smaller districts. The report highlights this potential expansion of staff as a cost concern, but that concern is misplaced because Proposal A prevents districts from increasing taxes to expand staff.

Sadly, no attempt is made to identify where mergers might make sense. Instead, all districts statewide are lumped together, causing input data to be heavily weighted with small rural districts. These rural districts – which comprise the majority of Michigan’s 550 districts – are not only smaller, but spend far less per pupil than their larger suburban counterparts.

Viewed from a purely mathematical standpoint, a district of 2911 students might appear fiscally ideal on paper. But such districts oftentimes don’t employ professionals whose expertise guides curriculum development, assessments, and technology. They’re simply too small to afford them.

In reality, adding such positions might help improve student achievement in those smaller districts, which on average score lower on MEAP assessments. Statewide, districts with less than 3000 pupils – the report’s optimum size – have the lowest MEAP math scores (excluding the City of Detroit).

Lagging achievement cannot be blamed on district size alone, and this report correctly notes there’s no correlation between spending and achievement. But achievement should be our schools’ primary goal, and it’s unbelievable that achievement wasn’t considered in the study. Perhaps the results would’ve been different if they were.

Actually, the more appropriate question to answer would be, “What district size produces the best academic results in the most cost effective way?”

That question might’ve directed attention toward a larger district like Utica Community Schools in Macomb County. The state’s second largest district, – at nearly 30,000 pupils – spends merely 2.5 percent more per pupil than the average sub-3000 student district. Yet Utica’s 8th grade MEAP scores in math are 15.5 percent higher, and their ACT scores and Advanced Placement exam participation rates are notably higher too.

The Utica example, while statistically insignificant, shouldn’t be summarily dismissed. Consider how their model might be applied in Oakland County, with 28 school districts ranging in size from 1,500 to over 15,000 students.

Details are unavailable on the precise the number of central office administrators in Oakland County, but a review of district websites suggests smaller districts have a 500 to 1 ratio of students to administrators, medium sized-districts are 750 to 1, and larger districts are 1000 to 1. It follows that there may be 270 administrators in Oakland County, presumably costing taxpayers – with benefits and retirement – at least $38 million per year. Many of them do the identical work of their counterparts in neighboring districts.

But merging into five new districts of 40,000 students each, and using the administrative structure of Utica as a model could eliminate this duplicated administrative overhead. Utica’s student-to-administrator ratio appears to be approximately 1500 to 1, which if applied here would project a need for 26 administrators per district, or 130 administrators in Oakland County.

This represents less than half the number of current administrators, and the savings could return $100 per pupil to the classroom. Incidentally, this doesn’t consider savings resulting from merging services, pooling purchases, etc., nor does it entail closing or merging a single school.

District mergers are not some panacea. The Mackinac Center correctly notes, “… neither mergers nor consolidations are likely to bring about dramatic reductions” in state spending. The potential savings proposed here are relatively small when compared to the nearly $2 billion spent on education in Oakland County.

But every percent of savings is meaningful to taxpayers, and more importantly to our children.

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Teacher Merit Pay makes sense

Here is interesting article that ran today on merit pay for educators:

Oakland Press: Many teachers skeptical of merit pay linked to student scores (07/08/07)

Teacher unions ignore the fact that merit pay is embraced and works well in private sector businesses that are similar to education. Professionals who are responsible for non-manufacturing creative work can be rewarded in environments where they cannot control every single variable.

What’s even more unfortunate that most teachers don’t seem to realize the current system is imperfect too, and is perhaps even worse than a merit pay system.

The current “all for one” system boosts pay for mediocre teachers, and restricts pay for those teachers who are outstanding. It does nothing to reward those that go above and beyond; they receive the same amount as those that do the bare minimum or less.

Teachers are currently rewarded solely for their ability to endure. They receive a raise for showing up, year after year. Perhaps the biggest flaw in this practice is that it’s so limiting to those that do the best job. It actually seems insulting.

And those that complain about teacher merit pay seem to forget there’s already an incentive plan in place for educators. They receive additional pay for earning higher degrees, which they certainly seem to do in great numbers. One might argue this isn’t fair for those who cannot afford additional schooling, but the unions seem to gloss over that fact. And despite this “flaw”, it shows that financial incentives do work in education, although the system misses the mark because there is no requirement that the degree be in the teacher’s actual line of work and doesn’t measure whether the additional degree is effective or beneficial to students.

But the union isn’t the only problem; school officials don’t help the situation either. I asked that we move the Rochester superintendent to a merit-based system, but the board’s status quo-based majority rejected the idea.

The article provides some insight into why teachers don’t like the idea. A teacher from California states, “When I look into the eyes of a student who I have taught in the past — or I stand at the door in the morning and my students say, ‘Mrs. Gore, I love you,’ or ‘Mrs. Gore, you’re such a good teacher’ — am I effective or not? I think I’m effective.”

Creating a relationship with a student is certainly one of the keys to teaching. We can give Mrs. Gore the benefit of the doubt that she is indeed loved, but that says nothing about whether she is teaching our children anything.

Educators also, “worry that educators in struggling schools, where students might be poor or speak another language at home, would have trouble getting their student scores up enough to earn the “effective” label.”

These are legitimate concerns. But the article goes on to say, “For their part, many educational policy-makers say that a merit pay system could take such circumstances into account.”

A merit pay system could be crafted to consider any number of factors. But it would need input and cooperation from teacher unions, and they rebuff any overtures. Their approach is to simply expect more taxpayer funds, with no strings attached.

The concern in general seems to be over the “uncontrollable” factors in life.

“Can you account for the child’s emotions? Can you account for whether their parents are getting them to school on time?” asked Sharon Vandagriff, a third-grade teacher near Chattanooga, Tenn.

“They’re looking at this as if we’re manufacturing automobiles,” said Sandy Hughes, who teaches high school English, French and Latin, also near Chattanooga. “With children, you’re working with unique individuals, all of whom have unique qualities. Our variables are so extensive.”

Despite these concerns, there is very clearly a science to teaching. Rochester Community Schools has among the best MEAP scores in the state. (MEAP is the Michigan test that measures how many children can demonstrate minimum proficiency in the state’s standards and benchmarks.) Rochester outperforms districts with overall higher socio-economic demographics, and also outperforms other districts with higher funding. It outperforms other districts that are larger and smaller. Rochester’s success is clearly measurable, despite the so-called extensive variables.

But even within the Rochester system, there are some buildings, and some teachers that clearly seem to outpace the others. I find it very frustrating that the union prevents the district from financially rewarding those responsible.

And finally, the “we’re not manufacturing widgets” argument is getting tiresome. There are many businesses that aren’t repetitive manufacturing companies, yet are able to design merit pay plans. Advertising and pharmaceutical companies are two great examples where creativity and hard work must prevail over an uncertain and uncontrolled environment.

Merit pay plans may not be perfect, and might occasionally need to be adjusted. But they would help to reward those teachers that do a great job, and serve as an incentive for those that could do better.

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School Board Spin

I remember talking to my father some 25 years ago about my perception that the UAW was going to destroy the auto industry. His simple reply stuck with me to this day:

“Perhaps they will, but don’t forget there are two signatures on every contract.”

That popped into my head this morning as I read a rebuttal to an opinion piece I wrote last month (found by clicking here).

The letter is from Frank Reid, the President of the Michigan Association of School Boards (MASB).

Detroit News: School boards can handle tough decisions (07/06/07)

The piece explains “school boards have held firm on (benefits) and other tough issues at the board table during negotiations”.

Since when?

The article somehow misses the fact that school boards got us into this mess in the first place by putting their signatures on the outrageous contracts that have been approved over the past 10-15 years or more. And they've not done much to correct it ever since.

These contracts are draining the state budget, and they’re so far out of whack now that "normalizing" them is going to be a long and painful journey.

I don't mean to suggest all school boards have been irresponsible, or that none are trying to fix these sins of the past. But the overwhelming majority deserve much closer scrutiny than they've been getting. And taxpayers need to start rejecting the spin that comes from school boards.

The article claims that “about half of the approximately 600 Michigan school districts have negotiated "less generous" health care packages for their employees”, but doesn't provide any specifics. That statement could be quite misleading, in part because it's only relative to the "overly generous" packages that school boards have been approving for 10-15 years or more.

Rochester, for example, approved a contract with a so-called "less generous" health care package in its recent settlement with its teacher’s union. The projected savings – after the projected 10% annual increase – equals $150,000 of the $10,000,000 health care tab for it’s 880 teachers and their families. Progress, yes, but hardly a significant step.

What the article fails to recognize is that taxpayers want reasonable, responsible, and meaningful reform, not token steps.

Mr. Reid - also a Trustee for Farmington Public Schools - points out that Farmington moved to a self-insured plan that “benefits taxpayers and still delivers high quality benefits to employees”. Rochester is also self-insured. But being self-insured – rather than having MESSA, the MEA-backed insurance plan – only saves districts from paying the inflated administrative costs of MESSA, which might amount to a one-time reduction of 5%, but does nothing to curb annual increases. The real problem is the level of benefits offered, and whether a district is self-insured or has MESSA doesn’t really impact the 90 percent of the cost driven by those benefit levels.

Unfortunately, the article does not reveal the average per-employee cost of Farmington’s insurance, so we really don’t know how prudent the Farmington board has been with taxpayer funds.

If it’s like most Oakland County school insurance plans, then it’s costing taxpayers 25% more than the average cost of private-sector benefits, and is increasing at a rate of 10% or more annually.

The article attempts to lead us to believe this “trend” towards “less generous benefit package(s)” is having some sort of impact, but the cost of benefits – both health and retirement – consumed 21% of education spending in 2000-01, and 25% in 2004-05.

Sadly, this letter simply shows how out of touch school boards are with reality. They need to stop trying to convince themselves that they’re making progress, and start taking real and meaningful steps to control their budgets.

Otherwise, any funding increases will continue to be funneled into benefits rather than curriculum development and other learning intervention strategies.

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In case the link doesn't work, I've pasted the full opinion piece below:

Friday, July 06, 2007
School boards can handle tough decisions

I would like to respond to a June 19 column regarding school boards' inability to negotiate: ("Teacher health reforms aren't worth tax hike").

The current trend in reform in school districts is to move to a less generous benefit package and smaller salary increases. Many school boards have held firm on this and other tough issues at the board table during negotiations; to assert otherwise is incorrect. The education management community, including the Michigan Association of School Boards (MASB), believes that it's important to explore all possible reforms before going to the public with a tax increase. I applaud any efforts by the legislature to address both revenue and school reform measures.

The writer implies that a May election date contributes to low voter turnout and union-endorsed candidates, but interest group participation occurs in any election, no matter what time of year it happens.

Some years ago, Farmington Public Schools was able to negotiate a self-insured plan that benefits taxpayers and still delivers high quality benefits to employees. In fact, about half of the approximately 600 Michigan school districts have negotiated less expensive health care packages for their employees. MASB supports school districts gaining access and using claims data to make meaningful decisions regarding benefits. MASB also supports legislative efforts to address problems in the current structure of school district legacy costs, retirement and retirement health care, for those coming into education professions.

Frank Reid
President, Michigan Association of School Boards
Board Member - Farmington Public Schools

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Year-round school: the results speak for themselves

I stumbled across this last fall and have been waiting to post it.

It was written in 2006, but it's as relevant this year as it was then.

Washington Post: Summer Vacation of Our Discontent (07/12/06)

It addresses the outdated practice of 3 consecutive months of summer break. Perhaps having the full summer off made sense when the kids were needed to help work the farm, but I believe most of us are past that.

Modern year-round schools are starting to emerge, and their results are impressive. Lake Orion's Carpenter Elementary is among the best elementary schools in Oakland County based on MEAP results. Their socio-economic demographics suggest that they should not be doing as well as they do, but the results speak for themselves. (Click here and choose DEMOGRAPHIC REPORT. Then select Fall 2006 Test Cycle, ISD: Oakland, District: Lake Orion, School: Carpenter Sorry for the cumbersome instructions, but the MDE doesn't provide an easy way to link...).

I haven't seen any study on Carpenter showing that the year-round school calendar is driving their success. But, if it quacks like a duck...

And for those that believe year-round schools mean NO summer vacation, I've included this note from Carpenter's website:

"Year-Round Education is an alternative to the traditional September-June school calendar. The school year is restructured so that the long summer vacation is shortened and vacation periods are distributed throughout the year, resulting in a more balanced calendar. It is a way of adjusting time to advance learning. "

I've posted the text below in case the link doesn't work:


Summer Vacation of Our Discontent

By Frederick M. Hess
Special to washingtonpost.com's Think Tank Town
Wednesday, July 12, 2006; 12:00 AM


Can our kids afford to take summer vacation? Right now, about 50 million children are on summer vacation across the United States. Many are discovering new interests at summer camp, playing ball at the Y, or traveling with Mom and Dad. But millions of others are loitering in parking lots and shopping malls, cruising iffy websites, and slouching toward academic disaster. For this second group, it's time to take a fresh look at the traditional summer break.

Summer vacation once made good sense -- back when we lived in a brawn-based economy, academic achievement mattered less, an absence of air conditioning or modern hygiene turned crowded schools into health risks, and children had moms who were home every day.

Historian Kenneth Gold has noted that summer vacation, as we know it, was an invention of the mid-19th-century belief that "too much schooling impaired a child's and a teacher's health." Community leaders fretted that summer was a "period of epidemics, and most fruitful of diseases generally," and sought to keep children at home or send them to the countryside.

In that era, the nation's first professional educators believed that too much schooling would exhaust both teacher and student. They thought that placid summers under parental supervision would be more beneficial than time spent in humid, crowded schools.

Today, things have changed. We know that, for today's children, knowledge and academic skills will be critical to their future success and happiness. In many communities, children are safer in well-run schools than they are at home alone.

Other advanced nations don't provide an American-style summer vacation. Most industrialized nations offer no more than seven consecutive weeks of vacation. Meanwhile, American school districts offer up to thirteen.

In a long-gone world of plentiful manufacturing jobs and self-contained economies, such comparisons mattered less. Today, however, our children will find themselves competing with peers from Europe, India, and China for lucrative and rewarding brain-based jobs.

Summer vacation can also be a massive inconvenience for today's middle-class families. In the 1960s, reports the Population Resource Center, more than 60% of families consisted of a father working out of the house, a stay-at-home mother, and multiple children. Now, as U.S. Census data show, two-thirds of American children live in households where two parents work or with a single working parent, meaning no one is home to supervise children during the summer. For these families, summer vacation can be more an obstacle than a break. Parents must find ways to occupy their children's time and to monitor their socializing and web usage from work.

The Urban Institute reports that, at most, just 30% of school-aged children in families with an employed primary caretaker are cared for by a parent during the summer. The Urban Institute study also notes that forty-one percent of working families with school-age children pay for child care during the summer, typically spending about 8% of their summertime earnings. Meanwhile, expensive school facilities, computers, texts, and transportation sit idle.

But the biggest problem with summer vacation today may be its impact on the academic achievement of low-income kids. In scores of studies, researchers¿including scholars at places like the Johns Hopkins Center for Summer Learning and the Northwest Regional Educational Laboratory -- have reported that these students lose significant academic ground in the summertime, while their more advantaged peers -- those more likely to read and attend pricey summer camps -- do not.

This has been a big factor in aggravating the "achievement gap" for urban and minority children. Programs with extended school years have had much success in boosting the achievement of these kids. The widely praised KIPP Academies, for instance, have employed a lengthened school year and a mandatory 3-4 week summer school session to boost achievement among their predominantly minority and urban students.

Today, "modified-calendar" schools exist in 46 states but enroll barely two million kids -- about 5% of all K-12 students. Why aren't more schools offering an extended academic calendar?

One fierce opponent is the "summer activity industry." The nation's golf courses, amusement parks, and beachside resorts depend heavily on a cheap teen workforce. Movie theaters want teens with spending money, and the summer camp industry depends on families needing a place for their kids.

Teachers unions, too, are reluctant to see the school year extended. Efforts to add even two or three days to the academic year typically provoke objections from teachers and angry opposition from union officials.

Let's be clear: This is not a "national problem" or a uniform one. Summer vacations are still a wonderful time for many families and communities. Legislators need not pursue one-size-fits-all solutions to "fix" the school calendar.

Rather, it's time to acknowledge that 19th-century school practices may be a poor fit for many of today's families. It should be much easier for interested families to find schools that operate into or through the summer.

State officials should strike down laws -- often supported by the summer recreation industry -- that restrict the permissible school year for most schools. They should also help provide the operational funds necessary to support schools that operate through the summer.

School boards and superintendents should encourage more of their schools to move in this direction and appropriately compensate teachers and staff. Extending the school year will have the added benefit of helping to make teaching a full-time, more lucrative profession for educators who choose to work in these schools.

Additional schooling should not be an invitation to drudgery or an attack on childhood. It would allow schools to include more recess and athletics throughout the year, give teachers more time to conduct rich and imaginative lessons, and provide more time for music and the arts¿all without compromising academic instruction.

Summer vacation can be a grand thing. But in the 21st century, for many children and families, it may also be an anachronism.

Frederick M. Hess is director of education policy studies at the American Enterprise Institute and currently working on Emancipating Education, a book that examines why American schools look like they do and how we might reinvent them for the 21st century.

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